​During the Committee of the Regions' plenary session on 31 January, EU regional and local leaders joined in debate with the European Commission's Vice-President and responsible for Economic and Monetary Affairs, Olli Rehn, about the impact of the consolidation efforts undertaken to counter the crisis and the next steps for the completion of the Economic and Monetary Union (EMU).

The President of the EU's Committee of the Regions (CoR), Ramón Luis Valcárcel Siso, said, "During the crisis, fiscal consolidation forced member states and local and regional authorities to reduce their investment on growth at a time when they needed it most. It is now imperative that we promote growth policies and employment initiates in order to maintain the social cohesion". He further stressed that, "If we want economic governance to work, we need effective coordination from the EU at the local level, allowing regions to launch and implement their own investment policies, based on local needs".

Vice-President Rehn responded by saying that, "Unfortunately during the first decade of the century unsustainable macroeconomic imbalances were accumulated in many EU countries, with high level of public and private debt making them unable to gather money on the market. Rebalancing the EU economy became necessary which is showing results in countries such as Ireland, Spain and Portugal". Nonetheless, he added, "Austerity programmes have their beginning and their end, on the condition of effective implementation".

The CoR First Vice-President, Mercedes Bresso, agreed on the results achieved by the emergency measures recommended by the European Commission but made it clear that, "The price we paid for those results is far too high". According to Bresso, "In the absence of a clear distinction between on-going current expenditure and social and economic investment, cuts had very limited impact on unproductive expenditure whilst slashing, instead, investment for growth". The priority of making sure that enough investment will be concentrated on intangible and human capital was underlined by CoR EPP Group's Markku Markkula (FI/EPP), who expressed the potential that innovation can bring to national budgets, economic development and a better quality of life for citizens. "There is a positive correlation between regions that invest in innovation and their social development performance" he underlined.

The need to focus on the quality of public expenditure rather than on horizontal cuts was also stressed by Mia De Vits (BE/PSE), who intervened on behalf of the CoR PSE Group. She insisted on the threats connected to unbalanced austerity policies, in particular the risk of deflation, recently evoked by the International Monetary Fund Managing Director, Christine Lagarde. In this respect, Vice-President Rehn admitted that whilst in some countries a long term perspective of low inflation is functional to the recovery and to the reduction of the debt service costs, a similar situation in relation to the EU average inflation would imply serious risks, "If the average inflation in the EU remains low, that will have a negative impact on Europe competitiveness, on export, domestic demand and on debt service. Therefore I have expressed concerns not for deflation, since the European Central Bank and Mario Draghi would take action to tackle it, but for a potentially long period of low inflation".

With regards to the design and implementation of shared economic policies, the need for a stronger role of regions and cities was underlined by Jan Bronś (PL/EA), "All measures implemented by the EU have to be democratic and should take into account the social consequences, that’s why the voice of local and regional authorities should be more and more considered". A stronger involvement of regions and cities was urged by CoR European Conservatives and Reformists Group's Adam Banaszak (PL/ECR), in particular in relation to the European Semester procedure, "To promote growth and a higher rate of employment, country specific recommendations need to be really specific and based on an adequate exchange of information. To achieve this aim, it is crucial to ensure an effective bottom-up cooperation, with a strong partnership between the Commission and local and regional authorities". Finally, on behalf of the CoR ALDE Group, Satu Tietari (FI/ALDE) expressed full appreciation for Rehn's commitment in countering the crisis "steering the ship of Europe in the right direction".